<div id="readability-page-1">It's been a while since data center equipment company Vertiv's (VRT 0.56%) stock looked like a great value, but that time has come around again. The ongoing demand for artificial intelligence (AI) applications creates unprecedented data growth, which only means more investment in data centers. The good news is that the broad-based sell-off in the Nasdaq Composite (^IXIC 0.28%) and some near-term negative news have brought stocks like Vertiv back into value range, and now could be a great time to buy the stock on a dip. <h2>A hidden AI stock to buy</h2> Nvidia partner Vertiv has a critical role in the data centers that power AI. The company designs, manufactures, installs, and services critical digital infrastructure. Its costumers include data centers selling into hyperscalers like Microsoft's Azure and Alphabet's Google Cloud, colocation providers like Equinix and Digital Realty, and large enterprises with their own data centers. Vertiv also sells to communications companies and various commercial and industrial customers. Its equipment helps customers with their critical power, thermal management (a crucial issue in data centers), and monitoring needs, and it also services its equipment. Its partnership with Nvidia means Vertiv co-develops its architecture so its power and cooling systems are compatible with Nvidia's solutions, including the Blackwell platform. <h2>Surging demand</h2> The Nvidia partnership and underlying demand for data centers led to an explosion in revenue at Vertiv, which is apparent in the chart of three-year sales growth. <img src="https://imageproxy.pbkrs.com/https://media.ycharts.com/charts/05fc291e1a75d5d5ae3247a006376fea.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="720" height="380" original-src="https://imageproxy.pbkrs.com/https://media.ycharts.com/charts/05fc291e1a75d5d5ae3247a006376fea.png"/> VRT Revenue (TTM) data by YCharts Moreover, management expects that momentum to continue in 2025, with its guidance calling for: <ul> <li>A 16% increase in organic sales to $9.2 billion.</li> <li>Adjusted operating profit margin expansion from 19.4% in 2024 to 21% in 2025, leading to a 25% increase in adjusted operating profit to $1.94 billion.</li> <li>Adjusted free cash flow (FCF) growing 15% to $1.3 billion.</li> </ul> <h2>Why Vertiv stock is a good value now</h2> Let's take a quick look at why the stock has been sold off this year (down 23% year to date as I write this) and why it's probably not something to be unduly worried about. First, there's been a broad market sell-off in technology stocks. Part of this comes down to valuation concerns, and another part comes down to the fear of a tariff-induced slowdown in the economy. There are tangible signs of slowing. For example, Delta and United Airlines have spoken of a slowdown in bookings, industrial giant 3M sees some order push-outs, and in the tech arena, automated semiconductor test equipment company Teradyne took a knife to its full-year guidance due to, you guessed it, order push-outs. <div><img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MTE0MjUvZGF0YS1jZW50ZXIuanBnJnc9NzAw?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="393" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MTE0MjUvZGF0YS1jZW50ZXIuanBnJnc9NzAw"/>The inside of a data center. Image source: Getty Images. </div> Second, although Vertiv's trailing-12-month orders rose 30% in the fourth quarter, they were flat in the fourth quarter compared to the same period in 2024. Both issues may prove temporary. Tariffs could be eased, and, naturally, there will be a short-term impact as companies adjust to new trading conditions. As for Vertiv's fourth-quarter orders, the main impact came from Europe, where data centers, starting on Jan 1, must report their power usage effectiveness (PUE). This requirement may cause a temporary slowdown due to the extra cost of compliance and adjusting to the new regulations. However, commercial real estate company CBRE expects data center supply in Europe to grow by 20% in 2025 alongside declining vacancy rates -- a bullish signal. Moreover, Vertiv's management maintains demand will accelerate in Europe in 2025. <h2>A stock to buy?</h2> The share price dip means that Vertiv trades at 25.6 times expected FCF in 2025, dropping to 18.8 times FCF in 2026 if you accept the Wall Street consensus for $1.77 billion in FCF in 2026. Those valuations are too cheap for a company growing sales at a mid-teens rate and earnings above 20%. As such, it's an appealing stock for investors looking to buy on a dip. </div>

Nvidia will release its first quarter report for fiscal year 2026 ending April 27, 2025. 

According to analysts surveyed by FactSet, Nvidia's first-quarter revenue is expected to increase 66% year-on-year to $43.3 billion; adjusted earnings per share will increase 44% year-on-year to $0.88. The growth rate of revenue and profits has slowed significantly compared with the same period last year. In the same period last year, Nvidia's revenue increased by 262% year-on-year, and its adjusted earnings per share increased by 461% year-on-year.

Nvidia will release its first quarter report for fiscal year 2026 ending April 27, 2025. According to analysts surveyed by FactSet, Nvidia's first-quarter revenue is expected to increase 66% year-on-year to $43.3 billion; adjusted earnings per share will increase 44% year-on-year to $0.88. The growth rate of revenue and profits has slowed significantly compared with the same period last year. In the same period last year, Nvidia's revenue increased by 262% year-on-year, and its adjusted earnings per share increased by 461% year-on-year.

NVIDIA Financial Results for Q4 Fiscal 2025

Vertiv (VRT) is positioned as a valuable investment opportunity due to the rising demand for AI-driven data centers. Despite a 23% year-to-date decline, the company's partnership with Nvidia and projected revenue growth—16% organic sales increase to $9.2 billion and a 25% rise in adjusted operating profit—suggest strong potential. Valuations appear attractive at 25.6 times expected free cash flow for 2025, making Vertiv a compelling buy for investors seeking to capitalize on market dips.

- Vertiv's stock is currently considered a good value due to increased demand for AI applications driving data center investments.  
- The company expects a 16% increase in organic sales and a 25% rise in adjusted operating profit for 2025, despite a recent 23% decline in stock price amid broader market sell-offs.  
- Valuations are seen as attractive, trading at 25.6 times expected free cash flow in 2025, making it a potential buy for investors.

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